Shrinking revenues to take toll on Lynchburg budget

City leaders say some unpopular decisions must be made this year as they head into a new budget cycle in the midst of an economic crisis.

Lynchburg is battling shrinking revenues and the city manager has hinted at the need to take “significant” personnel action in order to balance the new budget that will take effect July 1.

“I know it’s going to be a very tough year,” Mayor Joan Foster said during a recent interview. “We already know revenues are down, so there will be a gap there. We have to think about what’s the best and least painful way to make this thing balance.”

The city manager is slated to make his budget proposal to City Council during a special work session Tuesday. Council will follow that presentation with a series of its own budget meetings before approving a final document in May.

Six of the seven council members spoke late last week about the decisions awaiting them. All agreed it would be a challenging year.

“My priority is going to be making sure we squeeze every bit of value out of every dollar, because this budget is going hurt,” said Councilman Turner Perrow, Ward IV. “It’s not going to be a pleasant budget at all, and we have to make sure every dollar counts.”

Most members agreed cuts to citizen services were unavoidable at this point. The city is grappling with drops in consumption-based taxes — such as sales and personal property — and rollbacks in state aid.

Few details of the pending budget proposal have been publicly released in advance of Tuesday’s presentation, but city staff members have said they expect the overall budget to shrink by 2.6 percent in the new fiscal year.

Several council members said their focus will be on working to protect funding for core services, such as education and public safety.

“We have to maintain what we have and continue to meet basic needs like police, schools and roads,” said Councilman Michael Gillette, Ward I, adding even that is “not going to be an easy thing to do.”

At-large Councilman Scott Garrett said he would be “very focused” on preserving support for core services, while other initiatives will have to be the subject of “very frank and very candid” discussion about what the community wants versus what it needs.

“It’s really easy for everyone to say, oh, we want fill-in-the-blank,” he said. “… But it’s another thing altogether to say that these programs are well thought-out and well structured and we need them.”

One of the rare details known about the city manager’s budget proposal is that it will recommend keeping the real estate tax rate level at $1.05 per every $100 of assessed property value.

That would create a 5 percent increase in the overall tax burden on property owners following this year’s reassessment, the results of which were released earlier this month. The equalized tax rate — the rate at which the city’s tax revenue would not change — would be $0.998.

Garrett said he has to hear a “compelling reason” for raising the tax burden before he signs on to the city manager’s proposal.

“This is not the time to be raising taxes,” he said.

Four other members said they were inclined to support the measure, noting the city will already be suffering cutbacks without losing that additional revenue.

“I would like to see a reduction in the real estate tax rate … but based on the information we have, I’m not sure it’s going to be possible,” Perrow said. “We would have to find some savings elsewhere, and it might be possible all the savings have already been wrung out of this budget.”

Said City Councilman Ceasor Johnson, Ward II, “I think with where the rate is now, we’re still just going to be getting by.”

Foster and Gillette also said they were supportive of keeping the current tax rate. Most officials said they remained open to discussion on the matter.

Vice Mayor Bert Dodson declined to comment on any specific facets of the budget in advance of the council sessions. Councilman Jeff Helgeson, Ward III, did not return three calls for comment.

The city manager’s budget presentation is set for 1 p.m. Tuesday in City Hall, 900 Church St. Council’s first budget session is scheduled for March 17.